North Korea on Friday effectively rejected calls by South Korea to permit reunions of separated family members by demanding an end economic sanctions and resumption of tourism to Mount Kumgang, sources said Friday.

South Korea's Red Cross said it sent a message to its northern counterpart on Wednesday asking for working level talks to take place on Aug. 17 in either Munsan or Kaesong. The talks could touch on arrangements for the reunions that include exchanging names of separated family members.

 Millions of Koreans have been separated from their family members since the 1950-53 Korean War ended in a cease-fire, not a peace treaty, leaving the two sides still technically at war. In the past, the two countries arranged family reunions around important holidays such as Liberation Day that falls on Wednesday this year, and Chuseok, the Korean Thanksgiving holiday, that is celebrated by all Koreans.

According to the (North) Korean Central News Agency (KCNA), the country's official news outlet, Pyongyang's Red Cross made clear that if Seoul is serious about permitting separated family members to reunite it must reconsider its position on key issues. The response was made on Thursday, a day after it received the South's proposal.

The communist country's Red Cross said Seoul should end the "May 24" sanctions that were put in place after the sinking of a South Korean warship in the Yellow Sea in March 2010. It also said that tourists must be allowed to visit Mount Kumgang, the scenic mountain resort on its east coast that has been off limits since a North Korean guard shot and killed a South Korean tourist in July 2008.

Related to the latest North Korean demands, South Korea's Unification Ministry said the preconditions are tantamount to a rejection of talks.

"It can only be considered as a rejection," the ministry said, expressing its regret that Pyongyang has opted to take such a step.

Despite the rejection, the ministry said it will continue to do its best to engage the North to deal with the separated family issue in a humanitarian manner.

Related to efforts to arrange family reunions, the ministry and the Red Cross have received flak for not disclosing the move to the general public.

Authorities did not disclose the exchange of messages that took place this week. The last time Seoul officially mentioned inter-Korean family reunions was on July 25 when Unification Minister Yu Woo-ik said the tradition of holding family reunions around Liberation Day and Chuseok remained valid and that South Korea will continue to urge the North to allow separated families to meet. (Yonhap News)